Question 1

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

Accepted Answer

A) comparison 
B) reconciliation 
C) review 
D) segregation 
A) comparison 
B) reconciliation 
C) review 
D) segregation

Question 2

An adjusting entry is not required for

Accepted Answer

A) outstanding checks. 
B) collection of a note by the bank. 
C) NSF checks. 
D) bank service charges. 
A) outstanding checks. 
B) collection of a note by the bank. 
C) NSF checks. 
D) bank service charges.

Question 3

The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.

Accepted Answer

A) True 
 B)False

Question 4

If a petty cash fund is established in the amount of $200, and contains $119 in cash and $84 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

Accepted Answer

A) Petty Cash, $84. 
B) Petty Cash, $81. 
C) Cash, $81; Cash Over and Short, $3. 
D) Cash, $84. 
A) Petty Cash, $84. 
B) Petty Cash, $81. 
C) Cash, $81; Cash Over and Short, $3. 
D) Cash, $84.

Question 5

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

Accepted Answer

A) True 
 B)False

Question 6

When two or more people get together for the purpose of circumventing prescribed controls, it is called

Accepted Answer

A) a fraud committee. 
B) collusion. 
C) a division of duties. 
D) bonding of employees. 
A) a fraud committee. 
B) collusion. 
C) a division of duties. 
D) bonding of employees.

Question 7

In a voucher system, vouchers are prepared in the accounts receivable department.

Accepted Answer

A) True 
 B)False

Question 8

On a bank reconciliation, deposits in transit are

Accepted Answer

A) added to the bank balance. 
B) deducted from the bank balance. 
C) added to the book balance. 
D) deducted from the book balance. 
A) added to the bank balance. 
B) deducted from the bank balance. 
C) added to the book balance. 
D) deducted from the book balance.

Question 9

When opening a bank checking account, a signature card

Accepted Answer

A) indicates to whom money is to be paid. 
B) indicates each person authorized to sign checks on the account. 
C) is attached to all pre-printed checks. 
D) is required only when dealing with an out-of-state bank. 
A) indicates to whom money is to be paid. 
B) indicates each person authorized to sign checks on the account. 
C) is attached to all pre-printed checks. 
D) is required only when dealing with an out-of-state bank.

Question 10

Personnel who handle cash receipts should have the option of taking a vacation or not.

Accepted Answer

A) True 
 B)False

Question 11

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

Accepted Answer

A) Cash for $88. 
B) Petty Cash for $88. 
C) Cash Over and Short for $2. 
D) Cash for $85. 
A) Cash for $88. 
B) Petty Cash for $88. 
C) Cash Over and Short for $2. 
D) Cash for $85.

Question 12

The custodian of a company asset should

Accepted Answer

A) have access to the accounting records for that asset. 
B) be someone outside the company. 
C) not have access to the accounting records for that asset. 
D) be an accountant. 
A) have access to the accounting records for that asset. 
B) be someone outside the company. 
C) not have access to the accounting records for that asset. 
D) be an accountant.

Question 13

At April 30, Yaddof Company has the following bank information: cash balance per bank $2,300; outstanding checks $390; deposits in transit $275; credit memo for interest $50; bank service charge $10. What is Mareska's adjusted cash balance on April 30?

Accepted Answer

A) $2,185 
B) $2,245 
C) $2,300 
D) $2,340 
A) $2,185 
B) $2,245 
C) $2,300 
D) $2,340

Question 14

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

Accepted Answer

A) True 
 B)False

Question 15

Checks from customers who pay their accounts promptly are called outstanding checks.

Accepted Answer

A) True 
 B)False

Question 16

Reconciling the bank statement monthly is an example of

Accepted Answer

A) segregation of duties. 
B) independent internal verification. 
C) establishment of responsibility. 
D) documentation procedures. 
A) segregation of duties. 
B) independent internal verification. 
C) establishment of responsibility. 
D) documentation procedures.

Question 17

Maximum benefit from independent internal verification is obtained when

Accepted Answer

A) it is made on a pre-announced basis. 
B) it is done by the employee possessing custody of the asset. 
C) discrepancies are reported to management. 
D) it is done at the time of the audit. 
A) it is made on a pre-announced basis. 
B) it is done by the employee possessing custody of the asset. 
C) discrepancies are reported to management. 
D) it is done at the time of the audit.

Question 18

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Accepted Answer

A) True 
 B)False

Question 19

Jolene is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

Accepted Answer

A) documentation procedures are violated. 
B) independent internal verification is violated. 
C) segregation of duties is violated. 
D) establishment of responsibility is violated. 
A) documentation procedures are violated. 
B) independent internal verification is violated. 
C) segregation of duties is violated. 
D) establishment of responsibility is violated.

Question 20

Deposits in transit

Accepted Answer

A) have been recorded on the company's books but not yet by the bank. 
B) have been recorded by the bank but not yet by the company. 
C) have not been recorded by the bank or the company. 
D) are checks from customers which have not yet been received by the company. 
A) have been recorded on the company's books but not yet by the bank. 
B) have been recorded by the bank but not yet by the company. 
C) have not been recorded by the bank or the company. 
D) are checks from customers which have not yet been received by the company.

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

An adjusting entry is not required for

The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.

If a petty cash fund is established in the amount of $200, and contains $119 in cash and $84 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

When two or more people get together for the purpose of circumventing prescribed controls, it is called

In a voucher system, vouchers are prepared in the accounts receivable department.

On a bank reconciliation, deposits in transit are

When opening a bank checking account, a signature card

Personnel who handle cash receipts should have the option of taking a vacation or not.

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

The custodian of a company asset should

At April 30, Yaddof Company has the following bank information: cash balance per bank $2,300; outstanding checks $390; deposits in transit $275; credit memo for interest $50; bank service charge $10. What is Mareska's adjusted cash balance on April 30?

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

Checks from customers who pay their accounts promptly are called outstanding checks.

Reconciling the bank statement monthly is an example of

Maximum benefit from independent internal verification is obtained when

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Jolene is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

Deposits in transit

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Fraud, Internal Control, and Cash

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

An adjusting entry is not required for

The custodian of the petty cash fund has the responsibility of recording a journal entry every time cash is used from the fund.

If a petty cash fund is established in the amount of $200, and contains $119 in cash and $84 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

When two or more people get together for the purpose of circumventing prescribed controls, it is called

In a voucher system, vouchers are prepared in the accounts receivable department.

On a bank reconciliation, deposits in transit are

When opening a bank checking account, a signature card

Personnel who handle cash receipts should have the option of taking a vacation or not.

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

The custodian of a company asset should

At April 30, Yaddof Company has the following bank information: cash balance per bank $2,300; outstanding checks $390; deposits in transit $275; credit memo for interest $50; bank service charge $10. What is Mareska's adjusted cash balance on April 30?

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

Checks from customers who pay their accounts promptly are called outstanding checks.

Reconciling the bank statement monthly is an example of

Maximum benefit from independent internal verification is obtained when

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Jolene is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

Deposits in transit

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters